Woolworths CEO notes increase in prudent shoppers
Michael Luscombe, CEO of Australia’s largest grocery chain – Woolworths, has reported the deterioration in financial conditions has had an impact on consumers, with more caution in spending habits being exercised.
Speaking in Perth at the Retail Traders Association breakfast, Mr Luscombe noted an increase in sales of their private label goods had been one of the outcomes of the downturn. “What I’m seeing in our own business is that we’re doing OK,” he reported. “Customers are being smart with their money and so long as that continues there’s nothing intrinsically wrong with the Australian economy.”
“There is no doubt that everybody is tightening the belt a little bit and that doesn’t have to mean that people have stopped spending: I think they’ve become a little wiser in spending,” he added.
Mr Luscombe believes profit growth of between 11 and 14 per cent over the coming financial year will still be achieved but uncertainty about the market has led Woolworths to remain cautious in their expectations. He also suggested Woolworths still held a comfortable lead over their primary competitor, Coles, in terms of market share. “The last numbers showed us we were about 31 per cent of the food and grocery market and our nearest competitor was in the 20s,” Mr Luscombe claimed.
The topic of genetically-modified food was also raised, with Mr Luscombe outlining their policy with their private label goods was to not use GM ingredients unless there were scientific findings proving such foods were completely safe.